OIG Investigative Reports, Federal Grand Jury Returns Superseding Indictment Against Former School Superintendent Schrenko
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FOR IMMEDIATE RELEASE
February 8, 2005
U. S. Attorney's Office
Northern District of Georgia
75 Spring Street, S.W. - Suite 600
Atlanta, Georgia 30303
Tel: 404-581-6000
Fax: 404-581-6181
Federal Grand Jury Returns Superseding Indictment Against Former School Superintendent Schrenko
David E. Nahmias, United States Attorney for the Northern District of Georgia, Lester Fernandez, Special Agent in Charge, U.S. Department of Education, Office of the Inspector General, and Gregory Jones, Special Agent in Charge, Federal Bureau of Investigation, announced that a federal grand jury has returned a superseding indictment today against LINDA C. SCHRENKO, 54, of Grove Town, Georgia, A. STEPHAN BOTES, 47, of Alpharetta, Georgia, and PETER STEYN, 60, of Woodstock, Georgia. According to Nahmias:
The indictment returned today supersedes the November 10, 2004, indictment in which SCHRENKO, BOTES, and Merle Temple were charged with conspiracy, wire fraud, and theft of public funds. Today's superseding indictment charges SCHRENKO, BOTES, and STEYN with conspiracy, wire fraud, and theft of public funds. It further charges that SCHRENKO and BOTES engaged in money laundering, and that BOTES and STEYN structured financial transactions to generate cash for making contributions to SCHRENKO's gubernatorial campaign in 2002 that exceeded the amount permitted by state law. Merle Temple is no longer named as a defendant in the indictment because he entered a plea of guilty before United States District Judge Clarence Cooper on January 10, 2005, to charges of conspiracy, theft of federal funds, and wire fraud in the original indictment.
The superseding indictment alleges that in the summer of 2002, SCHRENKO, who at the time was the State School Superintendent of Georgia, conspired with BOTES, the owner of a computer consulting company, and STEYN, an officer of that company, to fraudulently obtain over a half million dollars of federal funds administered by the Georgia Department of Education. The indictment alleges that SCHRENKO personally ordered the Georgia Department of Education to issue multiple checks in amounts just under $50,000, totaling over $500,000, to various companies owned and controlled by BOTES and STEYN purportedly to provide computer licenses and services to the Atlanta Area School for the Deaf, the Georgia School for the Deaf, and the Governor's Honors Program. The indictment further alleges that BOTES directed a subordinate employee to funnel a total of approximately $250,000 of the funds obtained from the Georgia Department of Education directly and indirectly to SCHRENKO and others for the benefit of SCHRENKO's gubernatorial campaign through a series of cash payments, wire transfers through a foreign bank account, and other disguised financial transactions.
The superseding indictment also charges that SCHRENKO and BOTES engaged in money laundering, including transactions in which BOTES transferred a total of over $100,000 in fraudulent proceeds, and SCHRENKO negotiated numerous checks in the amount of $590 each that were drawn on bank accounts of companies controlled by BOTES. The superseding indictment further alleges that other disguised financial transactions were structured to route illegal contributions to SCHRENKO's campaign, including STEYN cashing an $8000 check and providing the cash to a subordinate employee who, at BOTES' direction, included that cash as part of $32,000 delivered to an official with the SCHRENKO campaign. The superseding indictment also alleges that SCHRENKO, BOTES and STEYN attempted to conceal their fraudulent conduct by devising false cover stories and making materially false statements to investigators, the public and other co-conspirators.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.
The case is being investigated by Special Agents of the U.S. Department of Education, Office of the Inspector General, and the FBI.
Assistant United States Attorney Russell G. Vineyard and Daniel A. Caldwell are prosecuting the case.
For further information please contact David E. Nahmias, United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan
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Last Modified: 03/02/2005
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